Tiffany Tai from Canva recently gave a presentation about brand value. She said that we should imagine for a moment that the world had a momentary lapse in memory and we all forgot what we know about Coke! How would we feel about this sugary, chemical-filled drink that we Know is so unhealthy?
Coke she says would probably go out of business and might even be deemed a health hazard. The brand is the very thing that has kept it alive. So what is the value of a brand? Well to coke it‘s 8 Billion dollars- more than 1/4 the value of the company.
Imagine for a moment that you are standing in an Aldi store. You are doing your weekly shop. The kids are driving you crazy but you have a fairly big dinner for a few friends and you need to get a few things. So you go to the isle where you are about to buy a Coke - yes it isn’t Paleo or Keto I know, but you feel you shouldn’t dictate how your friends live their lives. So as you are about to put it in the trolley you look over to the left and you notice that the no-name Cola and is cheaper than the Coke - which do you buy? If it was 10c cheaper would you buy it, if it was 50c cheaper do you buy it, if it was half price do you buy it? The branding and how well that brand story is told, is the difference in price that your product can demand over your competitors. It is the way that we trigger or cue a psychological response. It is the extra profit, as well as the length of time that people will choose your product or service over someone else’s.
So yes, brands most definitely have great value!
Now more than ever, we are unable to meet clients face to face and sell what we do through personal interaction. This is when the brand is, in our opinion, even more essential. It is the smile and the warm handshake of your company. The first impression a person will get and the lasting feeling they will hold onto.
"The thing that really fascinates me about all of this is the fact that I personally have worked with, constructed and understand all the nuances of how and why brands are created, but I can not separate myself from the response I have to certain buying situations. I often think about how we bought our cars. Both Barry and I have Audi’s.
So try if you will, imagine that the car you bought for yourself was made in a factory on any major highway in your area. Besides this factory are all the factories that make all the cars available in your country. All the factories look exactly the same. No signage to differentiate them. How do you possibly decide which car to buy? It is impossible. It’s far too overwhelming. Making decisions in this way would prevent you from getting on with your everyday lives and day to day decision making would become a nightmare.
Our brains are wired to look for patterns and create shorthand assumptions in order to make basic decision making possible. Have you ever watched how a child learns to walk upstairs? It’s an iterative process of trial and error, later on walking upstairs is not something you have to learn every time you do it. Your brain hardwired a shortcut to stair climbing. Much like how we learn to drive a car.
You know that feeling when you have driven to a meeting but you can’t remember driving there because you were so busy running through what you were hoping to cover at that meeting. That is your autopilot at work. You could not be learning to drive consistently. The road toll would be catastrophic. We use our autopilot continuously.
Your brand is the cue to trigger the shorthand assumptions the audience’s brain has internalised, stored away and learned about the brand story along their journey. The brand uses the autopilot, emotional response, automatically influencing how we make a decision.
I see the Audi logo on the car... The question is now, to buy or not to buy? Do you buy an Audi or a KIA?
So it is hugely frustrating to understand that even though I create the magic myself and understand the process. I am still not immune to branding. We are hardwired to react to storytelling - it’s in our DNA.And now - we are the proud owners of two Audi’s!"
Shelly
SAME CAR - DIFFERENT LOGO
What is the actual tangible value of a brand and how do you calculate it?
The brand value is calculated on whether or not your brand is highly recognised; well understood, it’s market share, profit margin as well as whether or not the target audience would feel comfortable recommending that brand to their peers.
Interbrand (the world’s leading brand valuator, the first company to receive ISO certification for brand valuation methodology, and the world standard) values a brand by looking at three key components:
HISTORICAL
(After tax operating profit) - (capital used to generate brand revenue and margin) = Financial forecast
ROLE OF BRAND
= % of purchase attributed to the brand future potential
BRAND STRENGTH
= The measure of brands ability to create loyalty therefore sustainable demand and profit into the future.
WHAT DOES A BRAND STRATEGY GIVE YOU?
Our create a brand strategy process makes this achievable. Let’s really break it down and make it something useful.
5 practical reasons why you should have a great brand strategy and powerful brand?
1. With a dinergy* Brand Strategy + creative execution you create a living appreciating asset with a great return on investment. This will mean that you will leave the world a better place, have happy customers and a great legacy company. The top 100 over past 20 years, have had annual compound growth of 4.4% on brand value alone!
2. With a dinergy* Brand Strategy + creative execution will drive business growth because customers will choose your brand above other products or services. Thereby increasing the number of sales. Every interaction a customer has with you (your business and product) will affect their perception and feelings. Every piece of communication your customers sees affects the growth of your brand. The more unified the message and better aligned it is with what your client needs the more trust and loyalty there will be. Greater loyalty leads to less shopping around by the potential target market.
3. With a dinergy* Brand Strategy + creative execution you can demand a premium and increase profit, because customers know, like and trust a great brand because they do what they say they will do and they stand behind their promises. A powerful brand can charge a premium while a diluted brand offers more chance for parity products to take over.
4. With a dinergy* Brand Strategy + creative execution you reduce risk because customer loyalty will kick in when mistakes are made or unforeseen disaster strikes. Brand strength is inversely proportional to risk. Giving your company a competitive edge as well as security going forward. A brand can also highlight unrealised strengths and weaknesses. It can protect you in troubled times. And all companies make mistakes at some point.
5. With a dinergy* Brand Strategy + creative execution you will differentiate yourself . Competitors may copy your product or service but a brand high on the brand ladder will shape our lifestyles, purchasing decisions and even our emotions, it will help consumers easily understand what they are buying differentiating it from the competition. Creativity makes you stand out and builds brands. In all its forms - concept, design, copy-writing, typography, photography, animation and more - creativity literally gives shape and form to a brand. The effective use of creativity, therefore, distinguishes brands, sustaining and evolving them over time.The higher up you go on the brand strategy ladder, moving from know to like and later trust and love, the more loyalty your brand will imbue therefore the bigger the competitive “moat” between you and your copy cat competitors. Thanks to creativity, you land up with a brand that’s bigger than your product.
So investing in a brand strategy and communicating your brand consistently and effectively through every piece of content and collateral you create will attract the right customers to build a strong, lasting brand. Positioning your brand in a way that helps you compete now - and tomorrow. This we believe is one of the few ways to ensure success, now and into the future, in a variable and unstable market. (from The world’s leading brand valuator, the first company to receive ISO certification for brand valuation methodology.) So I say the effort is well worth the reward.
BUT, if you have NO brand strategy...
1. You waste time and money.
You don’t understand your purpose, vision, mission, or values, so you make marketing and business decisions that don’t reflect them.
2. Your approach is chaotic and not targeted.
You don’t have a documented marketing plan, but you hope that whatever you’re doing will work.
3. Internal confusion and frustration.
Your team is fractured by disunity, confusion, and conflict, making it hard for employees to feel engaged and interested.
4. Your target audience is confused, and won’t take the time to try to understand - they will move on.
You don’t have cohesive brand messaging, so your content tends to be inconsistent at best, and contradictory at worst. As a result, it’s difficult to attract people who share your values (customers, employees, etc.). You can’t clearly articulate your brand, and as a result, you can’t carve out a discernible place in the market. In short, without a brand strategy, you lose.
So investing in a brand strategy and communicating your brand consistently and effectively through every piece of content and collateral you create will attract the right customers to build a strong, lasting brand. Positioning your brand in a way that helps you compete now - and tomorrow. This we believe is one of the few ways to ensure success, now and into the future, in a variable and unstable market.
Here's a tool to checkout how your brand is tracking.
One of the leading survey platforms that can be used to check how your brand strength and equity are faring. The criteria they use to measure brand equity are:
Familiarity: How often do you come across the brand & how well do you know what the brand is like.
Regard: Positive - negative.
Relevance: How appropriate a brand isto a customer.
Personality: Such as different, dynamic, reliable, best in category etc.
Engagement: How often if at all are you likely to purchase. Likelihood to purchase in future if at all. Likelihood to refer.
https://www.surveymonkey.com/r/Brand-Equity-Template
